2 philosophy of sc on pil prashant bhushan

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2 philosophy of sc on pil prashant bhushan

  1. 1. Has The Philosophy Of The Supreme Court On Public InterestLitigation Changed In The Era Of Liberalisation?By Prashant BhushanThe foundations of public interest litigation were laid in the late 70s with cases like theRatlam Municipalities case. The scope and breadth of public interest litigation wereexpanded in the Eighties from the initial environmental concerns, to concerns like bondedlabour, child labour, the rights of detenues, inmates of various asylums, the rights of the poorto education, to shelter and other essential amenities which would enable them to lead a lifeof dignity. Article 21 was expansively interpreted to include all these ri ghts and the rule ofLocus Standi was relaxed to enable any public spirited citizen to move the courts on behalf ofa person or persons who may not have the social or financial capacity to move the courtsthemselves. Subsequently, in the early Nineties the courts also took up as public interestlitigation, cases involving corruption in high places and the accountability of public servants.This new activism on the part of the courts naturally created serious rumblings of discontentin the political and bureaucratic establishments which charged that the courts were goingbeyond their normal role and were assuming extra constitutional powers. The politicalestablishment also threatened from time to time to curb the powers of the courts with regardto public interest litigation by legislation. However, since this activist role of the courtsgained increasing public support, the political establishment desisted from such legislativemisadventures. However, the charges of usurpation of extra constitutional powers by theactivist courts, continued to be made by all sections of the ruling establishment.Unfortunately however, these charges appear to have struck a sympathetic chord among asignificant section of the court, as appears from some of their pronouncements recently.There is now a large body of cases decided in the last decade where the court has not onlybetrayed a lack of sensitivity towards the rights of the poor and disadvantaged sections ofsociety, but has also made gratuitous and unmerited remarks regarding abuse of publicinterest litigation. This decade has also been the decade of “economic reforms” as they arecalled. Several public interest cases were filed during this period challenging alleged 1
  2. 2. perversions, corruption and other illegalities involved in the implementation of the neweconomic policies. Almost all these cases were dismissed. In several of them, the courthinted at and made remarks suggesting an abuse of public interest litigation. Since I hadmyself been involved in many of these cases as a lawyer, I thought that it would beinteresting to investigate whether one could see a change in the philosophy of the SupremeCourt with regard to public interest litigation during the era of economic reforms. This iswhat I have set out to do briefly, in this presentation. The results are quite illuminating andindeed, distressing.In BALCO Employees Union Vs Union of India (2002 Vol 2 SCC 343), where theemployees union of the government company had challenged its disinvestment on variousgrounds including the arbitrary and non transparent fixation of its reserve price, the SupremeCourt while dismissing the petition went on to make the following observations:“There is, in recent years, a feeling which is not without any foundation that public interestlitigation is now tending to become publicity interest litigation or private interest litigationand has a tendency to be counter-productive.” "PIL is not a pill or a panacea for all wrongs. Itwas essentially meant to protect basic human rights of the weak and the disadvantaged andwas a procedure which was evolved where a public spirited person filed a petition in effecton behalf of such persons who on account of poverty, helplessness or economic and socialdisabilities could not approach the court for relief. There have been, in recent timesincreasing instances of abuse of PIL. Therefore there is a need to re-emphasise theparameters within which PIL can be resorted to by a petitioner and entertained by the court."The court in this case refused to consider the petition of Mr B. L. Wadhera, a lawyer knownfor having taken up many serious public interest cases, on the ground that he was not directlyaffected by the disinvestment of Balco. It went on to observe, "it will be seen that wheneverthe court has interfered and given directions while entertaining PIL, it has mainly been wherethere has been an element of violation of article 21 or of human rights or where the litigationhas been initiated for the benefit of the poor and the underprivileged who are unable to cometo court due to some disadvantage. In those cases also it is the legal rights which were 2
  3. 3. secured by the courts. We may, however, add that public interest litigation was not meant tobe a weapon to challenge the financial or economic decisions which had been taken by thegovernment in exercise of their administrative power. No doubt a person personallyaggrieved by such decisions which he regards as illegal, can impugn the same in the court oflaw, but, a public interest litigation at the behest of a stranger could not to be entertained.Such a litigation cannot per se be on behalf of the poor and the downtrodden, unless the courtis satisfied that there has been violation of article 21 and the persons adversely affected areunable to approach the court. The decision to disinvest and the implementation thereof ispurely an administrative decision relating to the economic policy of the State and challengeto the same at the instance of a busybody cannot fall within the parameters of public interestlitigation. On this ground alone, we decline to entertain the writ petition filed by Shri B. L.Wadhera”.This effectively meant that a citizen could not challenge by way of PIL, the loot of the publicexchequer, unless he was personally affected. It is significant that these observations weremade in a case involving a challenge to an element of the so-called “economic reforms" ofthe government. It will be seen that the Supreme Court has almost without exception negatedall challenges to any element of the economic reforms package of the government, evenwhen such challenges were based on specific violation of law or evidence of corruption.In Balco itself, the challenge to the selloff of the PSU, was based inter alia on a completelynon transparent and arbitrary valuation of the company conducted in less than a week by avaluer of immovable property having no experience in the valuation of companies. It hadbeen pointed out that the valuation of the captive power plan ts of the company alone wereworth more than the price at which it was being sold. The court however refused to examinethis challenge by saying that the valuation was done by one of the known methods ofvaluation.In CITU Vs. State of Maharashtra, where the validity of the Enron power project had beenchallenged on the ground that it was being set up in violation of section 29 of the ElectricitySupply Act, that the project would be ruinous to the finances of the State Electricity Board, 3
  4. 4. and that there was adequate circumstantial evidence of corruption in the sanction of theproject, the court restricted the challenge only to examine the accountability of the publicservants involved in the sanction of the project. It refused to examine the challenge to theproject itself on the ground that they did not think it to be in public interest to go into thevalidity of a project which had been substantially set up and against which several previouschallenges had been rejected by the courts. This was said despite the fact that theconstruction of phase 2 of the project (which was more than twice the size of phase 1) hadnot even commenced at the time, and that none of the previous challenges to the project werebased on the grounds and material on which the CIT U challenge was based. One of thegrounds, on which CITU had challenged the project was that under section 29 of theElectricity Supply Act, it was only the Central Electricity Authority which had the power toexamine and grant technical and economic approval to the project. In this case, when theCEA was finding the cost of power from this project too high, the Finance Ministry told theCEA not to examine the financial aspects of this project and proceed to grant only technicalapproval. This is how the project came to be approved which went on to supply power to theState Electricity Board at a cost of upto Rs 27 per unit, as a result of which the supply fromthe project had to be stopped, leading to claims of thousands of crores by Enron in an arbitraltribunal in London.In State of Karnataka Vs. Arun Kumar Agrawal, (2000 1 SCC 210) the Karnataka HighCourt had ordered a CBI investigation into the circumstances in which a 1000 MW powerproject had been approved in Karnataka. The series of highly suspicious circumstances foundby the High Court which warranted such investigation were among others:A. That the financial capacity of the company, Cogentrix, which had been approved to set up this project was such that no reasonable person could think that it was capable of executing such a project. Its paid-up capital was only 130,000 US$, as against a project cost of over $1 billion. Its debt equity ratio was 19.2 is to 1 as against the norm of 2:1.B. That Cogentrix had falsely claimed in its techno economic feasibility report that General Electric Co would be its technical partner in order to ride piggyback on the technical experience of GE. 4
  5. 5. C. That China Light and Power which was subsequently brought in as a partner by Cogentrix had shown an amount of 191 million Hong Kong dollars as development costs in India (through its Hong Kong subsidiary, CLP international) though they did not have any ongoing project in India and had not shown how and on what these costs had been incurred. This Hong Kong subsidiary was subsequently shut down and another subsidiary by the same name was opened in the British Virgin Islands, a known tax haven for money-laundering.D. That though the requirement for power in Karnataka would mainly be in the Bangalore area, and that is why originally the application of Cogentrix was for setting up a 500 MW plant in Bangalore and another 500 MW plant in Mangalore. Later however, they were allowed to set up the entire 41 1000 MW plant in Mangalore, necessitating expensive transmission of power by the State authorities from Mangalore to Bangalore.E. That though the original permission for setting up the plant was given on the basis that Cogentrix would sell this power privately to whoever was willing to purchase it from them at mutually negotiated rates, thereafter the State Electricity Board entered into the power purchase agreement with Cogentrix to purchase the entire power at very high rates.The Supreme Court however made short shrift of the elaborate High Court judgment, holdingthat, "Thus none of the 13 circumstances noticed by the High Court can be characterised asgiving rise to any suspicion, much less the basis for investigation by a criminal investigatingagency.”In Centre for Public Interest Litigation versus Union of India (2000 8 SCC 606), the SupremeCourt dismissed the plea for an independent investigation into the governments decision tosell off developed offshore gas and oilfields from ONGC to a private joint venture. Thechallenge was based on a large number of facts and circumstances suggesting corruption inthe deal such as:A. The governments own estimates of the oil and gas deposits kept arbitrarily varying at different points of time and the deal was evaluated at the lowest of such estimates.B. An SP of the anticorruption unit of the CBI had filed a source information report to the effect that the deal involved a loss of thousands of crores to the public exchequer and 5
  6. 6. recommending that an FIR be registered so that a regular investigation could be commenced and searches and seizures made. However, instead of registering an FIR, the SP was transferred out of the CBI soon after he made this report, and the file on which he made the report was made to disappear. The CBI went on to file a false affidavit in the High Court, denying the existence of the file on which the SPs note had been made.C. The CBI had in another case being investigated by it recorded the statement of the private secretary of the Minister of petroleum who had signed the deal, that the Minister had received Rs. Four crores from Reliance Industries, one of the joint venture partners to whom the oilfields had been sold.D. Various high officials of the Ministry of petroleum and ONGC who were involved in the evaluation of this deal left their jobs and joined Reliance immediate ly thereafter.E. The CAG had submitted a report on this deal pointing out that: i) the government had not studied the comparative economics of running the gas fields and oilfields through the ONGC versus giving them to a private joint venture. ii) The estimates of gas and oil deposits kept arbitrarily varying at different points of time. iii) Though the deal was evaluated on certain claimed levels of operating expenses by the joint venture, the operating expenses were not capped in the contract, leading to a situation whereby the operating expenses actually claimed by the joint venture in the first few years of operation were higher than those of the ONGC. iv) The royalties and cess payable to the government of India by the joint venture on the extraction of oil and gas were frozen for the duration of the contract, though the JV was allowed to sell the oil and gas at the international market prices prevailing at any point of time.However, despite the above host of highly suspicious circumstances surrounding the deal, there port of the CAG, and the report of the SP of the CBI, the Court did not think it fit to evenorder an investigation in the matter, though it castigated and passed strictures against the CBIfor the loss of the file containing the SPs report and their false affidavits filed in the HighCourt. 6
  7. 7. In Delhi Science Forum versus Union of India (AIR 1996 SC 1356), the petitioners hadchallenged the award of telecom licences to private companies on various grounds, includingthat one of the companies HFCL which had made by far the highest bids in nine circles had avery small net worth which made it ineligible. It however sought to make up its net worth byentering into a joint venture with a foreign company which had a minor equity in the joint-venture, but 90% of its net worth. The petitioners also challenged the decision of thegovernment to place a cap of three circles for any single company, which effectively allowedHFCL to vacate its other six circles, where it was by far the highest bidder, without thepenalty of 50 Crores per circle which it would have otherwise had to pay since it could nothave possibly paid the licence fees of all 9 circles. Again the court dismissed the challengeby saying that the matter had been cleared by the tender Evaluation committee and therewere no allegations of malafides against it. All other challenges were repelled on the groundthat they amounted to challenges to the economic policies of the government.In Union of India Vs. Azaadi Bachao Andolan, (2003 8 SCALE 287) the High Court hadstruck down a government circular which compelled the IT authorities to exempt post boxcompanies registered in Mauritius as “offshore companies”, from taxation in India on theground that such a direction violated the IT Act and prevented the IT authorities from liftingthe corporate veil of these post box companies in order to examine their real place ofresidence. The Supreme Court however reversed the High Court decision, holding that thegovernment could in terms of its economic policies grant a tax holiday to foreign companiesin order to attract foreign investment. It gave short shrift to the argument that this wouldviolate the Income Tax Act under which non resident companies are taxable on theirdomestic income and that any change in the tax regime would have to be done by means of aFinance Act passed by Parliament and could not be made by the executive alone.The Oil companies case (CPIL Vs. UOI 2003 Supp 1 JT 515) is the only case to myknowledge in which the Supreme Court has allowed a challenge to any purportedimplementation of the new economic policy. It held here that the government oil companiesnationalized by Acts of Parliament which specifically mandated the companies to remain 7
  8. 8. government companies could not be privatized without amending the Acts and thus takingthe approval of Parliament.So we see that barring the exception of the oil companies case, the court dismissed all otherpetitions challenging any executive act taken under the cover of economic reforms. While itmay be possible to take the view that all these decisions are technically correct, it is difficultnot to get the feeling that the Courts decisions were influenced by its own approval of thenew policies of liberalisation, privatisation and globalisation. Indeed, the court in Balco wenton to say that, "lastly, no ex parte relief by way of injunction especially with respect to publicprojects and schemes or economic policies or schemes should be granted. It is only when thecourt is satisfied for good and valid reasons, that there will be irreplaceable and irretrievabledamage that an injunction be issued after hearing all the parties. Even then the petitionershould be put on appropriate terms such as providing an indemnity or an adequateundertaking to make good the loss or damage in the event the PIL filed is dismissed.” Asimilar proposition, virtually restraining the court from granting any interim orders in PILschallenging any “development projects”, was also laid down by the court in RaunaqInternational (1999 1 SCC 492). Obviously, if a public interest petitioner is asked to give abank guarantee or even an undertaking that he will make good the loss that may occur to thegovernment or any other person because of an interim order obtained in his petition, in theevent of his petition eventually being dismissed, no interim order can never be granted in aPIL. No petitioner, especially one who moves the court in public interest, can be heldresponsible for the vagaries of the court. Different judges have completely different views oneven matters of law. The Narmada matter for example came to be heard and decided by adifferent bench from that which had originally stayed the construction of the Dam. Even thebench which eventually dismissed the petition and allowed the construction to proceed hadcontinued the stay order in various hearings. Could or should the NBA have been saddledwith any loss occasioned to the government or the project authorities or the contractors onaccount of the stay order which stopped the construction for four years? It would completelystultify PILs, if such a pernicious view is allowed to prevail. 8
  9. 9. The activism of the Supreme Court in the last decade is most evident is environmental cases,particularly cases involving the urban environment or deforestation. Thus, the court has takensweeping and bold steps to move polluting industries out of Delhi, to improve the air qualityof Delhi by forcing commercial vehicles to convert to CNG, and to stop deforestation acrossthe country. But it must be noted that in a number of cases where the cause of theenvironment was pitted against “development projects”, such as large dams, or even hotelsand housing colonies, the cause of the environment gave way to the interest of suchdevelopment. It is important to note that in many of these cases, the legal soundness of thecase was also evident from the fact that some of the judges gave dissenting judgements orthat the court went against the advice of its own expert committees.In Narmada Bachao Andolan versus union of India (2000 10 SCC 664), despite the strongdissenting judgement of Justice Bharucha, pointing out that the Sardar Sarovar project wasproceeding without a comprehensive environmental appraisal and without even the necessaryenvironmental impact studies having been done, as was evident from the documents of thegovernment itself, the majority judges still went on to approve the project and allowed it togo on without any comprehensive environmental impact assessment which was necessaryeven according to the governments own rules and notifications. The underlying reasons andideology behind the subordination of the cause of the environment to the cause of"development", is also evident from the majority judgement. There are several passages inthe majority judgement, extolling the virtues of the kind of development brought in by largedams. The judgement even goes on to gratuitously emphasise the myth that the Bhakra damwas responsible for the green revolution in the country. This, despite the fact that the courthad specifically restrained the Narmada Bachao Andolan from making any submissions onthe pros and cons of large dams. The court also goes on to make disparaging remarks againstthe NBA as being an anti development organisation.The same subordination of environmental interests to the cause of “development” is evidentin the Supreme Courts judgement in the Tehri Dam case (N.D. Jayal Vs. UOI, 2003 7SCALE 54), where the governments own expert committee known as the Hanumantha Raocommittee had given an elaborate report pointing out a series of violations of the conditions 9
  10. 10. on which environmental clearance to the project had been given by the Ministry ofenvironment. The committee had pointed out that a number of studies which were necessaryto evaluate the environmental impact of the project had not been conducted and hadrecommended these be immediately conducted. However, despite this, though JusticeDharmadhikari held that in order to ensure compliance with the conditions of environmentalclearance, it was necessary to constitute an independent expert committee which wouldmonitor the compliance and further construction of the Dam could only proceed on the greensignal of this expert committee, the majority judgement did not even bother to ensurecompliance with the conditions of environmental clearance of the project. Again, thejudgement makes remarks extolling the virtues of development projects like such large dams.This attitude showing the Court favouring “development” over the rights of oustees or theenvironment is most clearly evident in the manner in which the court has sought to push theMega project called “Interlinking of rivers”. Consider the circumstances. On IndependenceDay last year, a paragraph was added in the Presidents speech to the effect that the problemsof floods and drought can perhaps be solved by interlinking the rivers. This paragraph wasenough for a lawyer appointed by the Supreme Court as amicus curiae (to assist the court) inthe Yamuna pollution case to file a short application praying that the court should direct thegovernment to take up this project. As if on cue, the bench headed by the then Chief JusticeB.N. Kripal issued notices to all the States and the Centre. On the next day of hearing, whichwas the day before the retirement of the then Chief Justice, an order was passed which is noweffectively being treated by the government as a direction by the court to undertake thisproject and complete it within the shortest possible time. The order noted that only the Unionof India and the State of Tamil Nadu had filed responses to the notice issued by the court. Itstated that the Union of India pointed out that the project would cost Rs 5,60,000 crores,would take 43 years, and would need the consent of the States. The State of Tamil Nadu hadfiled an innocuous affidavit, virtually saying nothing. The court noted that no other State hadfiled any affidavit and therefore it could be assumed that none had any objection to theimplementation of this project! After orally noting, that funds cannot be any constraint forthe government for a project in national interest, the court observed in its order that theproject should be completed within 10 years! It also went on to advise the government that in 10
  11. 11. case consent was not forthcoming from the States, the government should consider passing alegislation to obviate consent of the States for this project.All this for a project which would require funds equal to the total irrigation budget of thecountry for the next 44 years, if the Ninth Plan expenditure is any guide. And all this withouthearing any interested party, not even the States, without any discussion or debatewhatsoever, without completing even feasibility studies, leave aside the question of social,environmental, economic or optimality assessments! Such is the casual nonchalance withwhich this country is being pushed to a course which would have unparalleled andunprecedented, financial, social and environmental consequences.In TATA Housing Development Company Vs. Goa Foundation (2003 7 SCALE 589), thecourt went against the report of its own expert committee in allowing the construction of ahousing colony on land which had been held by the committee to be forest land. The courtheld that the committee had wrongly classified this land as forest land, by holding that thecommittee had deviated from its own norms. The court also relied on the reports of someother private experts filed by the Tata Housing development Company. Without entering intoan elaborate discussion of the merits of this judgement, it may only be noted, that suchmicroscopic examination of a report of the courts own expert committee has never been doneat the instance of a poor or weak petitioner. For example, the court did not critically examineor interfere with the report and recommendations of the Centrally empowered committeeappointed by the court, regarding fishing by poor local fishermen in the Jambudvip islands.The courts orders ba sed on the committees report had effectively deprived hundreds of poorfishermen of their livelihood who were using the Jambudvip islands.The period of economic reforms also appears to have coincided with an apparently decreasedsensitivity of the courts to the rights of the poor. This is evident from the attitude that thecourt has displayed towards slum dwellers, oustees and workmen. In Almitra Patel Vs. Unionof India, (2000 3 SCC 575) the court while adversely commenting upon the governmentspolicy to rehabilitate slum dwellers, remarked that, “ the promise of free land, at the 11
  12. 12. taxpayers cost, in place of a jhuggi, is a proposal which attracts more land grabbers.Rewarding an encroacher on public land with the free alternative sites is like giving areward to a pickpocket.” This, despite that the court was aware of the fact that most of thedwellers live in sub human conditions and do not have access to other houses, and the courthad earlier repeatedly pronounced that the right to shelter and housing is a fundamental rightof every citizen of the country.In Ekta Vs. Union of India, the Supreme Court refused to stop the eviction of slum dwellersin Calcutta who had been living in those slums for the last more than 30 years, despite thefact that they had no other access to housing nor were they being offered any alternativeplace to go by the government. This was a case where the High Court had ordered theeviction on the ground that the slums were a public nuisance. In Azaadi Bachao Andolanversus union of India, (2003) the Supreme Court even refused to examine the questionwhether the Land Acquisition Act in so far as it allowed compulsory acquisition of land frompersons who are dependent upon that land for their livelihood is violative of theirfundamental rights, since the Act does not obligate the government to provide them withalternative land or an alternative means of livelihood. The challenge to the validity of the Actwas made in the circumstances that the monetary compensation given under the Act does notenable the oustees to recover what they lose by their displacement as a result of compulsoryacquisition of the land, and that they are in effect deprived of their livelihood by suchcompulsory acquisition.The recent decision of the Supreme Court (T.N. Rangarajan Vs. State of Tamil Nadu),holding that there is neither any fundamental nor legal nor any moral right to strike on thepart of workmen, (which not only goes against the Statute where this right has beenrecognized, but also against several earlier judgements) has further strengthened theperception among a significant class of poor and disadvantaged sections of society, thatdespite its expansive pronouncements on the ambit of fundamental rights under Article 21 ofthe Constitution, the ideology of the Supreme Court has during this phase of “reforms”,shifted decisively in favour of the rich and powerful sections of society. 12
  13. 13. The above cases provide more than anecdotal evidence for the propositions that, a) TheSupreme Court as an institution has frowned upon challenges to any action of the executivetaken in the purported furtherance of “economic reforms”, even when such challeges werebased on violations of Statute and evidence of corruption, and b) The court appears to havediluted its interpretation of Article 21, in the recent past. At the very least, it has often notacted to enforce the rights that it had declared earlier in favour of the poor and the weak.In these circumstances, it is indeed tempting to argue that the recent drawing back of thecourt in PIL, and the fears expressed by it of the possible abuse of PIL is because the courthas in fact bought the ideology underlying the economic reforms- an ideology whichvenerates the virtues of the free market and undermines the role of the State in providingeducation, jobs, and the basic amenities of life to its citizens. Such an ideology runs counterto the Court’s earlier expansive interpretation of Article 21. This hypothesis does seem tooffer the simplest explanation for the above decisions of the Court. 13

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